IT Startup Tanium Cracks $1 Billion Valuation Club

Eighteen years in the making, with a father-son duo at the helm, Tanium is no overnight success story.

Still, the IT systems management and security startup that just became the latest tech company to vault past a $1 billion valuation seemed to appear from nowhere. Tanium announced on Tuesday morning that Andreessen Horowitz invested an additional $52 million in the company, on top of $90 million in May 2014--apparently making it the VC firm's single largest investment to date.

The new funding round values Tanium (based in Emeryville, CA) at $1.75 billion, according to a source close to the deal. That's up from about $900 million last year.

Tanium boasts impressive growth on the back of its signature product, a systems management platform that gives companies unprecedented access to their hundreds of thousands of computing endpoints: laptops, servers, virtual machines, even cash registers. Tanium's peer-to-peer-based architecture lets administrators find problem spots in seconds, rather than the hours or even days it can take to compile a report by reaching out individually to every networked computer.

Some of the biggest companies in the world have already been signing up for the service. Tanium says half of the top 100 largest US companies by revenue are already its clients, including five of the top 10 US banks and four of the top 10 US retailers. Total billings growth (the revenue model is part down payment and part subscription) has quadrupled year over year to $74 million in 2014.

And unlike many fast-growing tech companies, Tanium has been profitable since it came out of beta testing in 2012, according to the company. It's debt free and has total cash on hand in excess of $100 million.

It all sounds too good to be true, but Tanium spent 8 years refining its software and even longer in the IT management space. The founders are David and Orion Hindawi, a father-son team that started a similar company, BigFix, back in 1997. They later sold to IBM for $400 million and bootstrapped Tanium to take their original technology and speed it up by a factor of 10,000.

Orion Hindawi, Tanium cofounder and CTO

“We started Tanium in 2007 with the goal of re-inventing how organizations secure and manage their endpoints, which have quickly become the most business critical – and vulnerable – IT assets. With Tanium, even the world’s largest organizations can achieve 15-second visibility and control over every endpoint, even across the largest networks,” Orion Hindawi, who serves as CTO, said in a statement. “The ability to execute on this explosive market demand – while remaining cash flow positive – is a testament to our company, our people and our technology."

In addition to the funding, which will help Tanium expand overseas, the company announced new security and patching products that build on the original platform architecture. Building out such subscription services will be key to Tanium's long term growth.

“Tanium's magic innovation uniquely positions the company at the modern crossroads of systems management and security. Tanium's platform reimagines these categories and adds anew level of value and capability to forward-leaning IT teams,” Andreessen Horowitz partner Steven Sinofsky said in a statement. “Given their superb team, amazing growth, and unparalleled innovation,we could not be more happy for the opportunity to deepen our investment in this amazing company.”

Brian Solomon was a Forbes staff writer from 2011 to 2017. He most recently covered technology startups, with a special focus on the on-demand economy of Uber, Airbnb, and more. Previously at Forbes he wrote about everything from small business to billionaires to Wall Stre...